Fire hose

My last post was about uncertainty and volatility and how even in a low vol environment like today, marketers will magnify feelings of uncertainty to sell the product of the month. Regardless of the statistical fact that volatility is historically low, we as humans seem to be as pessimistic as ever about the future.

It is not uncommon to feel reluctance to implement a financial plan due to fears about what’s happening in the world right now. It is easier to say we’ll wait until the world is less scary before putting money to work. So when was the world less scary? 30 years ago when the threat of nuclear war was a legitimate concern? 20 years ago when the internet was certain to destroy brick and mortar stores? 10 years ago when the Middle East was in turmoil (ok, turmoil is the only constant in that region)? There has always been a seemingly reasonable excuse to sit on the sidelines. The market marches upwards despite (sometimes because of) even the most dire disruptions.

The sheer volume of negative information we are exposed to today is staggering. 50 years ago, people had a handful of television stations to obtain information from outside of their personal network of friends and acquaintances. Today we can curate our personal news feed of misery from thousands of media networks or millions of individual humans across the entire planet. The overthrow of a foreign government that might have gotten a footnote on page A14 of the local paper in the past can now be followed in real time on Twitter complete with pictures and video from the people who are living it. Conflict is not just something that we read about. We have a front row seat to every disaster on the planet, man-made and otherwise.

The leap forward in information technology allows us to quantify and catalog the human race’s failings on an unprecedented scale. This deluge of bad news can be overwhelming, like drinking from a fire hose.

It is important to throttle down the flow of information to a ‘drinkable’ amount. With the flow of information managed, we can start to build context and use this information to make better decisions rather than reacting to how the rain of bad news makes us feel emotionally.

Interestingly, the more we are able to quantify this bad news, the more we see that the world is actually a better place to live day by day. The world isn’t getting worse, we just have access to this information by virtue of a more connected globe. There’s actually overwhelming evidence that now is the best time to be alive in the history of mankind. The world is more peaceful than ever. We are living longer, more comfortable lives and the gains in longevity are being felt across the planet.

Don’t get me wrong – there is still plenty to gripe about. And that’s a good thing. When it’s all coming up roses, that’s the time to worry. The point is that it is important not to get caught up in the catastrophe of the day. Stop trying to drink from the firehose.